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Sunday, May 25, 2014

Stock Watchlist: May (late) 2014

I feel that Target (TGT) is extremely well priced at the moment. The price has nearly fallen to February levels. I believe in buying when blood is in the streets and the Target street is definitely bloody this week.

The knife is still falling and I am thinking of adding an initial position in this dividend champion. I will probably continue to add until the price starts to climb.

After the security breach, the company took a large hit. Their Canadian division is also not helping. But I feel that with their proven track record and new management, their business will get back on track. I remember Buffett saying that he likes to buy companies that are solid enough that even stupid managers will not be able to kill the company. Target happened to have stupid management for the last couple quarters. The stock is currently being offered at 2012 values. Their yield has grown from 2.79% to 3.02% after the massive sell spree.

Overall, Target offers a strong track record (46 years of increasing dividends!) at an attractive price and yield and I will consider adding this to my portfolio after due diligence.

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In addition to Target, Walmart also had a crappy quarter. Walmart isn't suffering as hard as Target. WMT blamed cold weather for last quarter. Revenue increased though, but not EPS.

The price of the stock appears appealing at the moment. I have initiated a small position in Walmart after the price drop this month. I will continue adding if it falls further. The yield is currently 2.54% which isn't bad.